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Sunday, July 15, 2012

How Much of My Donation Is Spent On Overheads (Or Why Admin Costs Are Bull***t)

How much of my donation is spent/wasted on admin/wages/overheads?

First of all I'll answer your question, and then I'll tell you why you're asking the wrong question.

For the sake of convenience I'll use the word admin to cover all wages, overheads...all that boring stuff that nobody likes to fund.

The amount of your donation that goes on admin depends on the organisation. It's usually on their website or available if you ask and it's usually about 10% or maybe 15%-20%. Some organisations will tell you 100% of your donation goes to 'the cause' and none goes on admin. What they do here is secure funding elsewhere, make out like that covers the boring stuff, and then make this pointless claim to you. Every charity has overheads. All money received is income and everything they spend on is expenditure. It's futile to say that the 20 Euro note you just gave is going to go here or there. It goes in to a bank account with all the other money.

And these figures, these percentages, are meaningless. What is admin? Whose wages are admin and whose are the cause?

The doctor performing surgery to give people their sight back...that's the cause, right? Or is it admin and wages? The person who co-ordinates these surgeries, schedules them and makes them happen...that's pure admin, right? But the cause wouldn't happen if this person didn't arrange it, so let's file it elsewhere.

The cost of transport - essential to making things happen - admin or cause? When the water charges come in...what do you want hospices to classify these as? Nurses need to wash their hands, people need to drink water. Cause or admin?

Amnesty International does the amazing work it does by raising awareness, campaigning, sending letters. Lots of printing. Lots of photocopying. It's probably all admin. But it's also probably all the cause.

All these charities have different definitions and they dress up their figures differently, fuelled by the public's demand to hear a percentage that they can judge their work by. It's meaningless and it's lazy. 100% of your donation goes to the cause every time. Whether it's spent on rehydration packs, surgery, wages, advertising or fundraising it is all the cause.

So can we stop asking it? And can charities either stop providing it or, when they do, issue a massive disclaimer on why admin costs are bullshit and start educating people on what question they should be asking.

You should be asking, "What will my donation do?"

Imagine two charities, both of which give people their sight back. One has 10% admin and one has 20% admin. Which do you donate to?

Well what if I told you the second one spends that extra admin on better doctors, which allows them to cure the blindness of more people each year. They spend more money on recruitment which allows a better calibre of staff - less quacks and less botched surgeries. Which do you donate to?

Instead of asking how much of my donation goes where, what about what is this organisation going to do? How many lives are you going to save?

I don't care how Apple or Google or Pepsi spend my money as long as I get a fantastic end product that meets or exceeds my expectations. I demand the same from my charities.

So let's change it.

If you're a charity let's start by educating the public and standing up for yourself in the media.

If you're a donor be proud of funding the wages, the admin, the overheads. They're part of the package.

To all the charities I donate to: I believe in you. I want you to spend my donation on your wages, on your toilet paper, the spatula on the new Rainbow Warrior, on your Xmas party. Whatever you feel it takes to change the world. I trust you. I know you will run your organisation to the best of your ability. Just keep me updated, and hopefully you won't have to waste any more time justifying yourself to the press and the rest of the people that don't trust you anyway.

4 comments:

Just before I read this I was on the phone with my creative staff discussing how we can better explain what admin costs are and how much they matter to the people we serve.

How do we offer a homeless person a cup of tea and a hot shower on a cold winter morning if the utility bills haven't been paid. How do we meet complex medical and mental health needs if we can't hire the best educated and experienced staff.

How do we plan for the future if we can't don't have money in the bank beyond next month. No one would be expected to run a business under such restrictive and simplistic restrictions.